Wednesday, October 15, 2008

Trust an Analyst? Think twice, check the date on this one!!!

You can not trust analyst getting the most face time. I think going on TV must do something to someones brain or the networks like to choose people who have issues with their intelligence before they go on TV. Eventually Bove will be right if he keeps calling for the Bottom and to buy banks. He has been spouting off about how great the deals are for banks since 2007. This article was printed in March 2008. Evidently, he didn't see the meltdown of July and October on the horizon. Shut up people!!!! Hubris and need for attention loses money for everyone. Bove says financial crisis over, buy banks Bear Stearns collapse was trigger for U.S. authorities to take drastic action By Alistair Barr & Riley McDermid, MarketWatch Last update: 1:37 p.m. EDT March 20, 2008 SAN FRANCISCO (MarketWatch) -- The financial crisis is over, giving investors a rare chance to buy bank stocks at attractive valuations, Punk Ziegel & Co. analyst Dick Bove said Thursday. During crises, problems reach a crescendo when even the most optimistic market participants become fearful. That usually prompts government and business to join forces on a big solution that may either work or fail, Bove said. Sponsored by: . "The actions taken by the Federal Reserve were innovative, dramatic and, in my view, brilliant because they went right to the problem," Bove wrote in a note to clients. "The actions being taken by the Federal Reserve are being mirrored by the Treasury, which now has finally grasped the scope of the problem." Interest rate reductions and steps to inject more cash directly into the banking system will help banks generate more profit. While most market participants are still worrying about write-downs and falling home prices, investors can now buy bank stocks at their cheapest levels in almost two decades, Bove said. "The last time an opportunity of this nature existed to buy bank stocks this cheap was in 1990," the analyst wrote. "The next time will be in 20 years. This is a once in a generation opportunity." Bove's advice stands in contrast to that of strategists at Citigroup Inc. (C: Citigroup, Inc C 17.66, -0.96, -5.2%) , who advised clients Wednesday to avoid leveraged financial-services company stocks because the "Great Unwind" has begun. See full story. Barclays Capital sounded more hopeful Thursday, echoing some of Bove's thoughts. Liquidity -- the ability to sell assets quickly for a solid price -- and confidence that trading counterparties have enough cash to pay up are crucial to keep financial markets functioning properly, said Larry Kantor, head of research at Barclays Capital. Recent actions by the Fed and others in the U.S. have made it clear that authorities are trying to make sure the supply of both these market ingredients is maintained, he said. "Successful efforts by authorities to restore liquidity and the orderly functioning of financial markets, along with the massive amount of policy stimulus that has already been applied ... are expected to lead to a modest recovery in the U.S. economy in the second half of the year," Kantor said. Still, he was more cautious than Bove on the outlook for banks and brokerage firms in the U.S. "While the measures that policymakers are taking to address the problems of liquidity and counterparty risk will restore some degree of order to financial markets, they are not likely to alleviate ongoing concerns about the size of losses at banks and brokers," Kantor warned. "Losses in securitized subprime mortgages may now be fully recognized, if not accounted for, but credit quality in the remainder of the non-agency mortgage market is still deteriorating," he added. "The quality of credit outside of mortgages -- including leveraged loans and securities backed by commercial real estate -- is just beginning to be tested under less favorable economic conditions and with reduced credit availability."

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